BB relaxes terms on holding foreign loan collaterals

FT ONLINE

The commercial banks are now allowed to hold collaterals on behalf of the on-resident lenders against external loans, availed by the state entities, without prior approval from Bangladesh Bank (BB).

"We've relaxed regulations allowing the authorised dealers (AD) banks to hold collaterals against external loans without prior approval from the central bank to facilitate transactions," a BB senior official said.

He also said it will be applicable, if the foreign lenders seek collaterals against their loans, approved by Standing Committee on Non-Concessional Loan of Economic Relations Division (ERD).

The central bank issued a circular in this connection on Monday, and asked the officials concerned of all AD banks to properly follow the instructions on holding collaterals on behalf of the non-resident lenders.

BB also issued another notification, allowing the banks to repay interest, service charges and instalments against overseas borrowing without prior approval from the central bank.